Friday, November 20, 2009

Even with a sinking dollar that aids exports, the trade gap still grows.

Important excerpt here:

Long term, however, economists say the U.S. needs to address its trade deficit by spurring exports to help offset imports of other nations' goods and services. One way to do that is by lowering the value of the dollar relative to other currencies, making U.S. goods and services cheaper abroad and more attractive to buyers.
That is already beginning to take place, as a recovery of the global economy has reversed investors' "flight to safety" that spurred demand for dollars during the past year. The U.S. dollar has been trading near a 15-month low this week against a basket of other currencies.
Even so, "the dollar may need to decline further," said Mr. Pandl, to spur exports enough to help narrow the trade gap and boost U.S. economic growth.

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